ay you need to take out a loan for $1,500. There are two options for repayment: Option A: short-term 6% interest loan with a term of 1 year. Option B: 1-year simple interest amortized loan at 6% interest, with monthly payments. What is the lump sum payment plan for option A? And what is the monthly payment for option B? What formulas did you use and why?
ay you need to take out a loan for $1,500. There are two options for repayment: Option A: short-term 6% interest loan with a term of 1 year. Option B: 1-year simple interest amortized loan at 6% interest, with monthly payments. What is the lump sum payment plan for option A? And what is the monthly payment for option B? What formulas did you use and why?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Say you need to take out a loan for $1,500. There are two options for repayment:
Option A: short-term 6% interest loan with a term of 1 year.
Option B: 1-year simple interest amortized loan at 6% interest, with monthly payments.
What is the lump sum payment plan for option A? And what is the monthly payment for option B?
What formulas did you use and why?
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